Where to Buy Solid State Battery Stocks

Solid-state battery technology is emerging as an advancement in energy storage, promising higher energy density, faster charging capabilities, and improved safety compared to traditional lithium-ion batteries. This innovative technology holds the potential to reshape various industries, most notably the electric vehicle sector, by addressing current limitations in range and charging time. As research and development progress, the sector is attracting considerable interest from investors seeking opportunities within this evolving landscape. Understanding the different types of entities involved in this technological frontier is important for exploring investment avenues.

Identifying Companies in the Solid State Battery Sector

Investors looking to gain exposure to the solid-state battery sector can consider various types of companies, each playing a distinct role in the development, production, and supply chain of this technology. These companies span from specialized developers to large diversified corporations and automotive manufacturers.

Pure-play solid-state battery developers

Pure-play solid-state battery developers are companies exclusively focused on advancing this specific battery technology. These firms are at the forefront of innovation, dedicating their efforts to overcoming the technical challenges associated with mass production and commercialization. Examples include QuantumScape (QS), Solid Power (SLDP), SES AI Corporation (SES), and Ilika (ILIKF). Ilika, a UK-based company, targets specialized applications like medical devices and industrial internet of things (IoT) before scaling to automotive uses.

Diversified technology companies

Diversified technology companies represent another category, where larger corporations have investments or divisions dedicated to solid-state battery research and development. These companies often possess substantial financial resources and existing manufacturing infrastructure, which can accelerate the commercialization process. Samsung SDI, Panasonic Holdings, and Murata Manufacturing are examples, integrating solid-state battery interests into their broader portfolios. BASF SE, a chemicals company, also holds interests in this space, contributing to the material science aspect of battery development. Their involvement suggests a long-term strategic commitment to the technology without it being their sole focus.

Automotive manufacturers

Automotive manufacturers are invested in solid-state battery technology, as it promises to transform electric vehicles by enhancing performance characteristics. Many car companies are either developing the technology in-house, forming partnerships with pure-play battery developers, or both. Toyota (TM), for instance, has made strides in solid-state battery technology, aiming to launch a vehicle equipped with these batteries in 2025. Other major automakers like Nissan (NSANY), Hyundai (HYMTF), Ford (F), BMW (BMWYY), Volkswagen (VWAGY), and General Motors (GM) are actively developing prototypes or partnering with battery companies to integrate solid-state solutions into their future electric vehicle lineups. These investments highlight the automotive industry’s belief in the technology’s potential.

Material suppliers

Material suppliers form the foundational layer of the solid-state battery ecosystem, providing the raw materials required for production. Companies that mine or process minerals like lithium are relevant, as solid-state batteries often require higher quantities of these materials than traditional lithium-ion batteries. Albemarle (ALB) is one of the largest manufacturers of lithium used in electric vehicle batteries and is actively studying solid-state battery needs for the long term. Other examples include Livent Corp (LTHM) and Lithium Americas Corp. (LAC), which specialize in lithium production and research for battery applications. Investing in these suppliers offers exposure to the broader battery market, including the growth of solid-state technology.

Investment Options for Solid State Battery Stocks

Once potential companies in the solid-state battery sector have been identified, individuals can explore various financial instruments to gain investment exposure. The choice of investment option depends on factors such as diversification goals and risk tolerance.

Purchasing individual stocks

Purchasing individual stocks provides direct ownership in a specific company, allowing investors to benefit directly from that company’s growth and success in the solid-state battery space. If a company like QuantumScape or Solid Power achieves a breakthrough or scales production successfully, direct shareholders could experience gains. However, this approach also concentrates risk, as the investment performance is tied solely to the fortunes of that single company. Investors holding individual stocks may also receive dividends, which are distributions of a company’s earnings. When selling stocks, any profit realized is subject to capital gains tax.

Exchange-Traded Funds (ETFs)

Exchange-Traded Funds (ETFs) offer a diversified approach to investing in the solid-state battery sector by holding a basket of stocks related to battery technology, electric vehicles, or materials. An ETF trades on stock exchanges like individual stocks, providing immediate diversification across multiple companies. For instance, the Global X Lithium & Battery Tech ETF (LIT), the WisdomTree Battery Value Chain & Innovation Fund (WBAT), and the Amplify Lithium & Battery Technology ETF (BATT) provide exposure to companies involved in the lithium cycle, battery production, and energy storage solutions. While not exclusively focused on solid-state batteries, these ETFs often include companies that are players or investors in the solid-state battery industry, providing broader exposure with reduced company-specific risk. ETFs are known for their lower expense ratios compared to actively managed funds.

Mutual funds

Mutual funds represent another option for diversified investment, where money from multiple investors is pooled to purchase a portfolio of stocks, bonds, or other securities. While direct solid-state battery-specific mutual funds are less common, some broader technology or automotive sector mutual funds may hold positions in companies involved in solid-state battery development or its supply chain. Mutual funds are professionally managed, with investment decisions made by a fund manager. They offer diversification across many holdings, which can help mitigate the risk associated with investing in a single company. Like ETFs, mutual funds can provide indirect exposure to the solid-state battery sector as part of a larger investment strategy.

Steps to Purchase Solid State Battery Stocks

After identifying specific companies or investment vehicles like ETFs that align with investment goals, the next step involves purchasing these securities. This process begins with establishing an investment account and then executing trades through a brokerage platform.

Opening a brokerage account

Opening a brokerage account is the first step, allowing individuals to buy and sell various securities, including stocks and ETFs. Most online brokerages offer straightforward application processes. During the application, individuals will need to provide personal details such as their name, address, Social Security number, and employment information for identity verification and tax purposes. Many online brokerages have eliminated account minimums, making it accessible to start investing with any amount.

Funding the account

Once the brokerage account is established, fund it by transferring money for investments. Several methods are available for depositing funds into the account.

Placing a trade

With the account funded, individuals can place a trade through the brokerage’s online platform or mobile application. This involves searching for the desired company’s stock or ETF by its ticker symbol. After locating the security, the investor specifies whether to buy or sell and enters the number of shares or units. A crucial decision is choosing the order type. A market order executes immediately at the current price, while a limit order allows specifying a maximum buy price or minimum sell price, offering price control but not guaranteeing execution.

Monitoring investments

After placing the trade, the brokerage platform will provide a confirmation of the order’s execution, including the price and quantity. Investors can then monitor their investments within their brokerage account, where portfolio performance and holdings are regularly updated. This final step completes the purchasing process, allowing investors to track the progress of their solid-state battery investments.